Who Says the PTAB Never Allows Amendments? The Question is: Can an Amendment Survive Appeal?

By: Tammy J. Dunn

One of the most common criticisms of inter partes review (IPR) proceedings, a specialized proceeding in which third parties can challenge the validity of a patent in front of the Patent Trial and Appeal Board of the US Patent & Trademark Office (“the PTAB” or “the Board”) on certain grounds based on prior art printed publications, is that there is no meaningful opportunity for patent owners to overcome validity challenges by amending claims.  Sure, a patent owner can file a motion asking the Board to amend a challenged patent claim in an IPR, but such motions are so rarely granted for the first few years after IPRs first came about that it is not uncommon for practitioners to advise clients not to undertake the expense of filing such motions as they are largely seen as futile.

Motions to amend in IPRs are occasionally granted, however.  The question next becomes whether or not a Board’s decision granting a motion to amend can withstand challenge on appeal.  In a relatively recent case decided by the Court of Appeals for the Federal Circuit, the answer appears to be “not necessarily.”  The case, Shinn Fu Co. of Am. v. Tire Hanger Corp., 2017 U.S. App. LEXIS 11787, 2017 WL 2838342 (Fed. Cir. 2017), involved a patent that generally related to apparatuses and methods for handling and supporting vehicle wheels that have been temporarily removed from a vehicle positioned on a lift or hoist.  Shinn Fu Opinion (“Op.”) at 2.  Tire Hanger was the assignee of the particular patent in question, which included 5 claims.  Id. Shinn Fu Co. of America, Inc. and Shinn Fu Corp. (collectively “Shin Fu”) requested inter partes review of all five claims of the patent on various grounds of anticipation and obviousness under 35 U.S.C. § 102 and 103.  Id.  Finding that Shinn Fu established a reasonable likelihood that they would prevail on at least one challenged claim, the Board instituted IPR on all five claims.  Id. at 3.

In response, Tire Hanger filed a motion to amend, seeking to cancel all five challenged claims and substitute them with new claims.  Id.  Tire Hanger did not challenge the Board’s analysis in instituting IPR, and therefore waived any subsequent arguments in defense of the patentability of those claims.  Id.  Tire Hanger’s amendments, generally speaking, specified the order in which to perform recited steps and added human involvement to steps that an apparatus or other structure could have otherwise performed.  Id. at 5.  Tire Hanger also included arguments in favor of patentability for the newly presented claims in view of prior art already of record, as well as recently discovered prior art references not of record.  Id.  Shinn Fu opposed the motion, arguing against Tire Hanger’s arguments and identified two additional prior art references.  Id.  Ultimately, the Board concluded Tire Hanger’s newly presented claims were patentable and granted Tire Hanger’s motion to amend.  Id.

Shinn Fu appealed to the Court of Appeals for the Federal Circuit.  Id.  The main issue on appeal was whether the Board erred by not adequately addressing Shinn Fu’s arguments against patentability.  Id.  The Federal Circuit concluded that the Board erred “by ignoring the manner in which Shinn Fu proposed its obviousness combinations in opposition to Tire Hanger’s motion to amend,” and found that failure was “arbitrary and capacious [sic].”  Id. at 5.  Apparently, in opposition to Tire Hanger’s motion to amend, Shinn Fu argued that certain prior art references be modified by adding features from particular references together.  Id. at 6.  The Board, however, addressed the prior art references by removing elements from individual references to achieve the resulting combination and found no motivation to combine the references in this manner.  Id.  Most significantly, the Board ignored Shinn Fu’s proposed obviousness combination, after acknowledging that Shinn Fu’s manner of combining the references was key to Shinn Fu’s argument.  Id. at 6-8.  Because the Board did not provide any analysis on Shinn Fu’s proposed manner of combining references in its key obviousness combination, the Court had no meaningful way of reviewing the Board’s patentability determination in light of Shinn Fu’s arguments.  Id. at 9.  Therefore, the Court reversed the Board’s obviousness determinations on the amended claims, vacated the Board’s order granting Tire Hanger’s motion to amend, and remanded back to the Board for further proceedings.  Id. 

It is too early to tell what the Board will do on remand if the parties do not settle prior to the Board revisiting this case; however, based on how rarely the Board reverses itself in other cases, one could probably bet the Board will reach the same conclusions, but this time include explanation and analysis as to why it disagrees with Shinn Fu’s arguments.

For companies who already have been involved in IPRs and for those who have not yet been involved but who may be contemplating challenging a competitor’s patent or considering the consequences of having its patents challenged, this case serves as an example of a situation where appealing a Board’s Final Written Decision would be worth it.  It is important to note, however, that the Board’s error here was not in disregarding the teachings of a particular reference, but rather in the Board’s failure to address the arguments the parties presented to it.  As the Court explained, “the law does not require that the Board address every conceivable combination of prior art discussed throughout an IPR proceeding, no matter how duplicative the other references are.  The Board does have an obligation, however, to address the arguments that the parties present to it.”  Op. at 9.  Statistically speaking, IPRs are still heavily favoring petitioners; however, not as dramatically as they used to.  It is inevitable, however, that one party or another involved in an IPR proceeding, and sometimes both, will receive a PTAB decision with unfavorable results.  Shinn Fu v. Tire Hanger provides a little insight into what to be looking for when considering appealing such a decision.